To say that government is not serious about Consumer Protection is tautology. To fathom that Consumer Protection Laws are a palliative for consumer problems is tautology. To state categorically that Consumer Protection Laws are the disease of the cure is tautology. To contemplate that Consumer Protection Laws are a panacea for consumer problems is tantamount to condoning fraud…and standards are not a topical anaesthesia for surgical equity in the marketplace but rather a bitter pill for both unethical businesses and irresponsible consumers to swallow in order to heal them from within.

In the second episode of the first of his four lectures of the 2012 BBC Reith Lectures entitled “The Human Hive: the Rule of Law and its Enemies,” Professor Niall Ferguson, an economic historian, professor of history at Harvard, and a fellow of Jesus College, Oxford, makes a number of observations regarding consumer protection, which the writer shares.

In his discourse, Niall Fergusson identified ‘misconceived regulation’ and the ‘failure to apply regulation and the law’ as one of the troubling aspects of Consumer Protection. All the detailed regulation in the world would not do much to solve consumer problems unless the immediacy of enforcement presents a ‘clear and present danger’ to unscrupulous businessmen and unethical businesses.

Infinitesimal ConsumersJust within the month of June 2012 the confidence of a physically challenged was shaken at the court of law in Ghana when the very presiding judge ruling on his case came in pomp, éclat and plaudit to set him aside up the staircase for His Majesty’s passage to the second floor courtroom. The judge’s cortege of police officers and court clerks bawled at this poor victim, a consumer of the Disability Law, to give way to His Majesty without the exercise of any humility, compassion and mercy on the practically useless Disability Law in this case. If the courtroom, where the law is served to consumers is not disabled-friendly, what is the usefulness of the effect of the Disability Act? This poor consumer wished ‘His Majesty’s pomp was brought down to the grave, and the noise of His viols:…that the worm was spread under Him, and the worms covered Him’[Isa 14:11 KJV].

Darwinian EconomyThe much delayed Consumer Protection Bill, however yet to be conceived, has given much utopian expectancy to Ghanaian consumers in spite of the weak institutional regulation of the already existing laws. Given that we are in an ‘Election Year,’ the most unpopular government achievement would be to promulgate a Consumer Protection Law that could tighten up businesses, which in no doubt covertly sponsor politics and political parties. The consequential result will end in these businesses tightening up their political sponsorship and, practically, no government would wish to be the hero in this consumer epic, irrespective of political leaning.

That is not to say that it is inconsistent to suppose that consumers cannot have laws and rights in their favour. If the Hobbesian world dictates that law picks on rights [which are based on personal or civil liberties] and commands them, then where the law does not pick on rights the latter could have a problem with enforcement in law. That is to say that consumer protection laws that are not derived from basic consumer rights render consumer rights as mere consumer liberties, natural or moral as they may appear. Businesses may promote their rights in competition laws but at the same time seek their liberties when it comes to consumer protection laws. To recapitulate Thomas Hobbes, Consumer Rights are not Consumer Protection Laws. Consumer Protection Laws impose duties and responsibilities on businesses and the government while being preventive, whereby, they protect consumers from deception and fraud. If businesses fear the impact of rights-based consumer protection laws they will have the propensity to stall any processes intended to promote consumer protection legislation.

Consumer LibertiesIf the rule of law, a state of order in which events conform to the law is paramount to the protection of consumers, perceiving consumer rights as akin to property rights that can be bought and sold is a no brainer. Whether the rule of property (property rights) or the rule of lawyers (rule of law) prevails, consumer rights are irrevocably not negotiable instruments subject to regulated or free market trading. Alluding to the rule of property is to swing between Karl Marx’s ‘Capital’ and Hernando de Soto’s ‘Mystery of Capital’. If rights are considered only within the context of positive rights as recognized within municipal or international legal systems, then they are premised on the rule of law from whence lawyers are premised on rights defence, according to Niall Fergusson. Consumer rights then are premised on rights defence. Thus, if consumer protection laws are not formulated on the basis of consumer rights giving grounds for their defence in a court of law, consumers, consumer rights and consumer protection laws will become an entertaining circus of clowns, tamed animals and fleeting illusionism.

Dinosaur Businesses & Regulatory ExpropriationThe most important and cardinal of consumer rights border on basic needs such as water, electricity, public transportation, telecommunications, access to finance and credit, are in majority monopolized by companies with a lion’s share of state ownership that are apt to err with a political veil and a duplicity of unapprehensive state regulation in the financial sector. In the case of water and electricity, at least, without regard to the law of unintended consequences, the Managing Director could publicly boast of consumers’ inability to obtain redress from the courts of law. Consumers, eventually, are the beasts of burden and the victims that bear their leaven of waste and inefficiency on their consumer monthly bills.

In their frustration, consumers and their attempts at accumulating capital as would-be entrepreneurs could be as revolutionary as the trigger of the ‘Arab Spring’ against such injustice and consumer-unfriendly rent-seeking capitalist government-majority companies: “26-year-old Tarek Mohamed Bouazizi, burned himself to death in front of the governor’s offices in the town of Sidi Bouzid last December 2010, precisely an hour after a policewoman, backed by two municipal officers, had confiscated his only capital: two crates of pears, a crate of bananas, three crates of apples and a second-hand electronic weight scale worth around $180. His self-immolation sparked a revolution.”

Consumer Protection in Ghana is, eventually, becoming an enemy of the rule of law.

The JungleConsumer Rights under the law of nature may be rather personal liberties. Consumer rights are not naturally endowed as to constitute an inherent enforceability. It is undeniable that consumers in any society are born free and endowed with natural rights. The unscrupulous businessman is also born free just as corrupt enforcement officers of weak regulatory institutions and they all have rights endowed by nature. The right of choice, for example, was given man from creation with a caveat: the right to choose good or evil. Man by nature, endowed with rights but free to choose, broke the law meant to protect him from making the wrong choices. If natural moral laws were enough for the self-preservation of consumers there would be no need for consumer protection laws, a reflection of God’s commandment to the first man “And the LORD God commanded the man, saying, Of every tree of the garden thou mayest freely eat: (17) But of the tree of the knowledge of good and evil, thou shalt not eat of it: for in the day that thou eatest thereof thou shalt surely die [Gen 2:16-17 KJV].” If this should be deemed natural law as deriving from natural rights, then natural laws are meant to institutionalize natural rights. A free-born consumer endowed with natural rights will not live to see the force of these rights under the Rule of Law. This means that enforcement of rights as privileges is only possible when there are rights-based laws to go with them. But laws of nature do find their place in consumer protection but not explicitly reflected in the globally accepted consumer rights.

Consumer Education rather constitutes self-preservation without the influence of government or peer pressure from civil society than ‘objective-social-collectivist’ rights. However, some consumer rights are constitutional in that government has a responsibility to provide, for example, basic needs to her citizens, who are consumers of public goods and services. The Constitution, some believe, does not reinvent the wheel but rather turns it as Sarah Palin – neither philosopher nor theorist — muses: “The Constitution didn’t give us our rights. Our rights came from God, and they’re inalienable. The Constitution created a national government to protect our God-given, unalienable rights.” Nevertheless, consumer rights are unenforceable in law unless backed by consumer protection laws. A worst case is consumer rights in international relations and international law, where industry (businesses) refuse to accept the existence of such rights if they are not explicitly backed by international law, another version of Ayn Rand’s circular theory of ‘objective-social-collectivist’ rights.

Where there is no consumer protection law, it does not really make a difference when you are living in the jungle. In such an evolutionary environment in nature’s farm, everyone develops a thick skin: from the elephant to the cockerel to the umbrella tree and even to the eagle.

In a dog-eat-dog world, consumers in the Third World and in some advanced countries are only protected by their own immune systems other than external Machiavellian forces that only militate against them in the end.

What is Consumer Protection in the absence of a backing law and self-motivated civil society organisations?

In Platonic and Machiavellian terms, having the appearance of Consumer Protection than the reality of its existence in the manifestation of laws and institutions and the apprehension thereof has become the present predicament of Ghana and Ghanaian consumers. Weak government institutions and the semblance of regulatory enforcement and their reality as lame ducks have become the enemies of both Consumer Protection and the rule of law.

Anyone used to mosquito bites is likely to be living in a developing country. In the same manner consumers that are exposed to most consumer problems are dwellers of developing countries, most likely to be citizens of a utopian Consumers’ Commonwealth for the Anglophones and anglophiles or a politically assimilated DOM-TOM, for the Francophones, including francophiles.

Let us do some scuba diving by making a naïve observation of the naked perambulating ‘traditional madman’ in Ghana, who is discarded by psychiatry, that prowl the cities reclaiming the streets, excepting the environs of the heavily guarded ghost haunted Fortress Ghana that is ironically fully exposed on Google Earth considering that even Diplomatic Missions have been heavily smudged beyond detection and their coordinates undeclared.

Our traditional madman, like the moon, goes round and comes around in many forms: sometimes as a consumer, sometimes as a manufacturer, wholesaler, seller or service provider and at times as the government.

In retrospect, Consumer Protection has evolved in all forms in Ghana: sometimes in the form of political persecution or public scourging in the name of ‘Kalabule’ [consumer rip-off], or price control laws in a quasi-communist milit-o-cracy determined by Machiavellian ‘armed prophecy’.

Given this status quo, Ghanaian consumers have been anaesthetised by rhetoric, breakdown in the rule of law, deceptive appearances and empty pre-election promises ever unfulfilled.

The aforementioned traditional madman sleeps in the streets in rain or shine, fully exposed to the capricious elements and most importantly, to zillions mosquito bites yet he hardly contracts malaria. Is it because he has become immune to the bites of this minuscule vampire bearing leviathan parasites of political lies and unscrupulous business exploitation or is it because malaria is only a condition of the mind far from a disease?

Whether in limbo or out on a limb the Ghanaian consumer, it appears, has developed a thick skin. After all, regulatory enforcement institutions can be simulated as distinguished consorts of unscrupulous businesses. To put your faith in them ‘It shall even be as when an hungry man dreameth, and, behold, he eateth; but he awaketh, and his soul is empty: or as when a thirsty man dreameth, and, behold, he drinketh; but he awaketh, and, behold, he is faint, and his soul hath appetite:…’ [Isa 29:8 KJV].

To cry ‘Consumer Protection’ is all a vexation of the spirit and a chase after the wind, a Hobbesian attitude to life as a consumer in ‘the state of nature,’ in the absence of authority and the law:

“…think about how you behave: when going on a journey, you arm yourself, and try not to go alone; when going to sleep, you lock your doors; even inside your own house you lock your chests; and you do all this when you know that there are laws, and armed public ofﬁcers of the law, to revenge any harms that are done to you. Ask yourself: what opinion do you have of your fellow subjects when you ride armed? Of your fellow citizens when you lock your doors? Of your children and servants when you lock your chests? In all this, don’t you accuse mankind as much by your actions as I do by my words? Actually, neither of us is criticizing man’s nature. The desires and other passions of men aren’t sinful in themselves. Nor are actions that come from those passions, until those who act know a law that forbids them; they can’t know this until laws are made; and they can’t be made until men agree on the person who is to make them. But why try to demonstrate to learned men something that is known even to dogs who bark at visitors—sometimes indeed only at strangers but in the night at everyone?” [Thomas Hobbes, Leviathan, XIII, ‘The natural condition of mankind as concerning their happiness and misery’]

Resolved: On Tuesday, 12th July, 2011, the ‘Electricity Company of Ghana (ECG) Customer Disservice Series’ released a new episode. The story not being an original script, a wrong meter reading resulted in a bill of GH¢ 57,000 instead of GH¢ 2,700, resulting in a power disconnection at the premises of CIT SYS Co Ltd. According to ECG, it was an enforcement policy to disconnect high debtors immediately, even if it is their fault for not delivering electricity bills for over four months, for making the wrong reading [which is no reading at all but an estimation by a lazy meter reader], and for short-changing a Ghanaian consumer.

Even with instruction from the PURC, it took altercations, bigotry, chauvinism, arrogance and a snapshot of the old image of poor customer relations to get PURC’s instruction taken heed to. The ECG power suppliers are Conservatives that really know how to wield their power!

The protagonist, the District Manager of the ECG Makola Division was playing Don Quixote, feeling larger than life, and boasting of his power to disobey instructions from the PURC and the ECG Director of Customer Service.

The melodrama was a scene that depicted the ECG disconnection team robots blaming the ECG Billing and Claims Department for the inefficiency of the latter and claiming that the only way to get ECG to act responsively is for wrongfully disconnected consumers to rather put pressure on ECG as they (the disconnection robots) have to do their disconnection work anyway.

ECG Customer Service Model

After all the corrections are made and the PURC instruction was finally heeded to, who now pays for lost business income resulting from the ECG billing mistake and the wrongful disconnection and when? PURC?

The prophesy of the Consumer Partnership was true as it has come to pass that the PURC lacks the drive to enforce its publicity stunts intended to make the organisation look consumer-friendly. Making laws and regulations is one thing and enforcing them is another ball game all together. The process of enforcement must go beyond letters and phone calls to bringing to book men behaving badly at ECG.

I may sound alarmist but certainly many Ghanaian electricity consumers have not taken note of the poor quality of electricity that we are all receiving- a situation that obviously leaves us short-changed. The truth is, poor quality electricity is slow in output and takes longer to power certain appliances whilst costing consumers more.

To quote Brian Hitchen of the Sunday Express, UK, ‘technically minded people will scoff and say it is a figment of my imagination. But I’m sure that my electric kettle is taking longer to boil and that my toaster isn’t popping up quite as fast as it used to do. The electric kettle element is not scaled with limestone deposit and there are no lose wires or crumbs in the toaster…”

I decided to carry out a little research on this for one litre of water, boiled in a one-litre electric kettle of 1010 Watts and recorded the following times for different times on different days:

0630hrs- 05:39:40 secs

0645hrs- 06:30:48 secs

0700hrs- 06:30:81 secs

1300hrs- 06:59:46 secs

1600hrs- 06:45:53 secs

1930hrs- 07:12:72 secs

2045hrs- 08:22:38 secs

Obviously, my small research tells us something: it is expensive and a rip off to use your iron, toaster, kettle or any other heating appliance in the evening but cheaper when you use them before 6:30 am and 6:30 pm. Why do we have to pay a premium for using our appliances during peak hours and less during ‘off peak’ hours? How come the same electricity supply can last 05:39:40 seconds at one time and 08:22:38 seconds at another time to power the same appliance for the same task? Try this at home if you are a savvy consumer.

The world consumer movement has long recognised that electrical energy is of fundamental importance to public welfare and the well-being of consumers worldwide. The satisfaction of basic needs is one of the basic rights of consumers.

Electricity supply in Ghanahas poor coverageand poor continuityof supply as well. That is, many people have no network connection and many of those that are connected face frequent interruptions of supply and ‘power surges’. In Ghana, consumers are constantly having their appliances damaged by such surges, for which no compensation has ever been paid. Well, can the Electricity Company of Ghana (ECG) be sued?. YES! YES!! YES!!… and as a class action…

Due to this malfeasance of a public utility provider, consumers (especially businesses) have made their own ‘off grid’ arrangements, thus switching between grids or dropping out of the system. All of a sudden, this misfortune has opened our third eye to the availability an usefulness of solar power, no bitters required.

If the ECG cannot live up to the ‘50 years of Freedom’, why can’t other providers be encouraged to participate and unbundle the mess? Competition among generators can take place even within the public sector (as in Norway) but unbundling is frequently associated with the introduction of private sector participation (PSP).

Despite the difficulties there have been some relatively successful examples of PSP. In Peru there have been improvements in coverage (nationally from 52 per cent in 1990 to 76 per cent in 2003) and long-term reductions in real prices since privatisation of the principal generators in 1990. Chilean electrification rose from 53 per cent in 1992 to 76 per cent in 1999, relying heavily on PSP. However, in both Peru and Chile, much of this improvement was due to government led programmes to improve rural coverage in particular since 1993. There have also been some less successful examples. In El Salvador, the period since privatisation in 1998 has seen high tariff increases (64 per cent) while tariff subsidies have been diminished progressively. In Honduras, the relatively recent introduction of PSP has had little, discernible impact on coverage. On the other hand, there are relatively successful publicly owned networks too even in relatively poor countries such as Costa Rica where coverage has been very high for a long period of time, or Morocco where rural electrification rose from 19 per cent in 1995 to 39 per cent in 1999.

It is still uncertain whether unbundling and PSP will constitute a long-term improvement but certainly, we do not need more power for ‘free night calls’ on our electricity bills so that our kettles, toasters and irons must work not to the detriment of a good night’s sleep and our consumer power.

NEWSFLASH: Electricity consumers across the country can now take action against the Electricity Corporation of Ghana and its affiliate institutions for erratic power supply. A new policy by the Public Utilities Regulatory Commission (PURC) and the Energy Commission, which seeks to regulate the number of hours electricity providers can interrupt power supply in a year has been outdoored after the recent Public Sector Policy Fair. Good work by PURC and Energy Commission but is it just an action plan that was designed to be rolled out as an outcome of the policy fair or is it just a publicity stunt designed to make them look good?

Well, Ghanaian Consumers, time to get your ready reckoner, a calculator, a watchman, and a Lawyer of course! How do you prove power outage in your area? Was the wiring of your house done with ‘To Papa Preko’? Have you not overloaded your limited output sockets in your home? Does your ECG Meter give you a printout of the quality of electricity supply to your end that sometimes go up to +/-15% beyond the 220 volts? Was is your neighbour that caused the ECG supply pole to fall down and cut the supply? Is it a monkey that was caught between the wires that caused that blackout…and you blame ECG for the jumpy monkey? What a cheap publicity stunt!

On March 15, World Consumer Rights Day (WCRD) 2011, consumers in Ghana are adding their voices to the global campaign for fair financial services. The Consumer Partnership (The COP), in a move to restating the previous year’s concerns about the vulnerability of a borrower beware (caveat emptor) situation to shift to a lender beware (‘caveat venditor’) approach, is advocating for an independent financial regulator in Ghana far from the Bank of Ghana and its insider Investigation and Consumer Reporting Office (ICRO).

According to the World Bank/CGAP, there are as many bank deposit accounts in the world as there are adults. And yet, over half the adults in the world are ‘unbanked’ and 150 million new consumers join the market for financial services every year.

Consumers International (CI), the global voice for consumers around the world has issued a set of international recommendations for strengthening consumer financial protection to G20 leaders, the Financial Stability Board, the OECD and the World Bank.

The report, Safe, fair and competitive markets for financial services: recommendations for the G20 on the enhancement of consumer protection in financial services, calls for the establishment of ‘mandatory financial consumer protection bodies: national regulators with full authority to investigate, halt and remedy violations of consumer protection law, including, where necessary, the right to define specific practices or products as unfair, deceptive or otherwise illegal’. Among the recommendations are also the following related to consumers and their patronage of financial services:

Information design and disclosure

Contracts, charges and practices

The structure and functions of national financial consumer protection bodies

Redress and dispute resolution systems

Promoting competition in financial services

Measures to promote stability and safety of consumers deposits and investments

Access to basic financial services and the role of new forms of service.

According to Consumers International Director General, Joost Martens, “These ground-breaking recommendations are the product of a shared sense of anger within the consumer movement that the rights of financial consumers have been neglected for too long. They provide a clear and comprehensive set of demands for significantly improving financial protection for consumers everywhere.”

The financial crisis dramatically illustrated that weak consumer protection poses a significant risk to the wider economy as intimated by Sheila Bair, the Chair of the US Federal Deposit Insurance Corporation, “There can no longer be any doubt about the link between protecting consumers from abusive products and practices, and the safety and soundness of the financial system”.

As part of her development support, the German government and its development agency Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) awarded a project to GOPA in Ghana from November 2010 to June 2013 to help streamline the microfinance sub-sector through Responsible Finance, one of its components. This is aimed at Banking Supervision, Financial Literacy and Consumer Protection and consists of technical advice, training and mentoring for the management and technical staff of the Bank of Ghana, the ARB Apex Bank and CUA in the areas of strengthening the supervision and internal controls of rural banks and credit unions as well as improving the consumer protection in the financial sector. It includes, above all, support to the planning and implementation of the institutional reorganisation of the banking supervision (incl. the corresponding consultation processes), technical support to the merger of selected rural banks and credit unions, and the strengthening of the Investigation and Consumer Reporting Office of the Bank of Ghana.

In as much as this is laudable, The Consumer Partnership believes that much more is required of the government of Ghana to show her commitment to protecting Ghanaian consumers from a product as complex as financial services. Over-reliance on consumer education, which is a necessary but wholly insufficient response to the problem, has not solved the case of weak financial consumer protection that is a problem commonly shared by consumers in countries with well-established financial services as well as consumers in countries where the sector is relatively new.

Ghana, while still embarking on the necessary steps towards a new consumer protection law, cannot presently boast of consumer protection legislation but rather a number of legislations that deal with consumer protection issues. The lack of a comprehensive consumer protection law is often to be blamed on defective national trade policies that have evolved over the years.

According to the Ministry of Trade, the Ghana Trade Policy approved by Cabinet in 2004 is set within the context of Ghana’s long-term strategic goal of achieving middle-income status and becoming a leading agro-industrial country in Africa. It was designed to provide the Ministry with clear guidelines for implementing Government’s domestic and international trade agenda as well as ensure a consistent and stable policy environment within which the private sector can operate with certainty. To ensure that these policy objectives are met through the structured implementation of policy prescriptions, a detailed implementation blueprint – the Trade Sector Support Programme (TSSP) – was developed and launched in February 2005. It details out specific activities in 10 thematic areas (which together contain 27 sub-projects) to be undertaken annually for the achievement of the policy prescriptions contained in the Ghana Trade Policy.

The fundamental principle underlying the Trade Policy Is that the private sector is the engine of growth, with Government providing a trade enabling environment to actively stimulate private sector initiatives. This is to be achieved through the full spectrum of trade policy instruments across the ten (10) thematic areas that have been the basis of the Ghana Trade Policy objectives.

The new Ghana consumer protection law is to be based on the Consumer Protection Policy as captured in the Ghana Trade Policy with the sub-themes of Consumer Protection, Health and Safety of Consumers, Economic Interests of Consumers, Access to Adequate Information, Consumption and the Environment, Consumer Representation, Competition Policy and Government Procurement. Short of a single fundamental objective, the new consumer law must ensure a fair and transparent market place in which the rights of consumers are recognized and protected. Protecting consumers’ economic interests is as important as regulation to ensure that the goods and services are available at a reasonable price and are safe.

Ghana being a Third World country, the problems of consumers are more related to the provision of essential services such as drinking water, sanitation, education and health care, than the market-related ones. The new consumer protection law must give special attention to the basic needs of disadvantaged consumers, in both rural and urban areas, including low-income consumers, and those with very low levels of literacy. It must clearly spell out the rights of consumers and the responsibilities of suppliers of goods or services and regulate all aspects of the purchasing cycle for goods and services, from the advertising or marketing of products, the sale of goods, full disclosure of product or service information to consumers, the terms and conditions of contracts and after-sales services including the respect of guarantees and warranties, refund and return policies. The Ghana Consumer Protection Law must integrate the universally accepted consumer rights into law by referring, implicitly or explicitly, to eight specific consumer rights, namely:

The Right to Basic needs

The Right to Safety

The Right to Information

The Right to Choice

The Right to Representation

The Right to Redress

The Right to Consumer Education

The Right to Healthy Environment

As constitutions of countries have evolved to reflect a citizens’ rights-based approach, so are consumer protection laws. The Consumer Protection Law for Ghana must move beyond mere consolidation of scattered sectoral laws and regulations to crystallizing and reforming consumer rights as enshrined in the various laws of Ghana as well as fair trading regulations. This will ensure an easily-accessible, consumer-friendly, cross-cutting, rights-based approach to the development of a single, comprehensive legal framework for consumer protection. As the review of existing laws is inevitable considering that there are a number of obsolete consumer protection provisions that need to reflect modern consumer economics It should not be a mere major review of commercial and fair trade laws but must make provision for the drafting of new ones. It must cover much ground to the extent of providing for future innovative business fraud schemes and unfair trade practices.

Many developing countries on the various continents such as Argentina, Brazil, Chile, Botswana, Uganda, Malawi and South Africa have moved towards a comprehensive rights-based approach to their development of legislation for consumer protection that was guided by the UN Guidelines for consumer protection under the themes of Physical Safety, Economic Interests, Standards, Essential Goods and Services, Redress, Education and Information, and Health.

Beyond the establishment of a Consumer Protection Authority and Small Claims Courts, the Ghana Consumer Protection Law must move for the creation of the necessary institutions to take care of general consumer rights, product quality and safety and the specialized area of financial services that will all strengthen the Consumer Protection Regime such as a Consumer Product Safety Commission and a Consumer Financial Protection Commission.

As consumer groups in Ghana are moving for the new consumer protection law, which they believe will protect Ghanaian consumers, the Consumer Partnership is of the opinion that given the present environment of lack of legal enforcement compounded by a lacunae of resources, a new act of law is no guarantee of better consumer protection although it could be a first step in the process. The Consumer Partnership also believes that some of the voluntary standards developed by the Ghana Standards Board, such as the Advertising Code must be passed into law making reference to it as a Legislative Instrument (LI).

Consumer Protection is not a one-way street and requires consumers to act responsibly as no quantum of protection can secure irresponsible consumers. Consumer Protection is a process that involves consumers, service providers, producers and the government in a blend of roles and responsibilities. Thus, a working definition of Consumer Protection proposed by the Consumer Partnership given this background should include

‘the responsible ethical behaviour of consumers, producers or service providers in the respective buying and selling of products or services and the effective control of the marketplace by the government through the enforcement of laws and regulations, the promotion of standards and the dissemination consumer education.’

This presupposes that for consumer protection to exist, prevail, and be effective, the following conditions must be satisfied:

Consumers must be aware of their rights and responsibilities

Consumers must be responsible in the exercise of their rights

Consumers must be aware of the ethical consequences of their consumption

Producers and ServiceProviders must be responsible for the consequences of selling shoddy goods and services

Producers and ServiceProviders must be ethical in the conduct of their business

Government must regulate the marketplace through policy, laws and regulations

Government must exercise its responsibility of promoting standards, Consumer Education and Consumer Protection through an Ombudsman and other supporting agencies.

Of critical importance is the essence of Consumer and Business Education as a government responsibility even with the enactment of a new consumer protection law. Consumers need consumer education to build their capacity to act as rational and responsible consumers in the market place; Businesspersons need consumer education to build their capacity to become ethical businesspersons, to serve consumer interest, satisfaction and well‐being for a profit, rather than to profiteer from them; and Manufacturers need consumer education to build their capacity to become ethical manufacturers to serve consumer interest, satisfaction and well‐being, also for a profit and not mislead consumers to profiteer from them.

The actions of educated consumers and responsible businesses are often highly effective in minimising the harm caused by shoddy services and unsafe products. More importantly, they do so in a way that poses the least obstacles to business activity and to the ability of consumers to choose the goods and services that they prefer.

Responsible businesses go to considerable lengths to ensure that the products which they market are safe for consumers and that consumers are provided with sufficient information to use products safely. Many Ghanaian consumers take for granted that they need to educate themselves about the safety characteristics of the products which they purchase.

In their own bid to protect themselves, Ghanaian consumers need a set of tools to equip themselves with knowledge for their own safety. These tools of self-protection include protecting and optimizing their limited resources, avoiding product misuse, seeking information on products before buying them, using their buying power intelligently by patronizing quality goods and services while boycotting fake ones.

Consumer advocates in Ghana have often made the mistake of thinking that knowledge of consumer rights and the enactment of consumer protection laws will provide a safe haven for Ghanaian consumers. In every country in the world, even in the absence of a consolidated Consumer Protection Law, various statutes in the various sectors of the economy already contain provisions that are meant to protect the interests of consumers and it is the lack of legal enforcement that has been the bane of the system. Some of these laws and regulations are the mandates of various regulatory agencies in the country that are responsible for their enforcement and there are consumer protection provisions in all of them. Prioritizing consumer protection within their mandate has been the growing concern of Ghanaian consumers as they find very little being done in this area. Most Ghanaian consumers question in whose interest some of these government regulatory agencies are working as they believe that these government agencies are more protective of businesses within their jurisdiction than protecting consumers. This is buttressed by the fact that government regulatory agencies have not got sub-offices in the central business districts and other major markets where most consumer problems persist and are more prominent than their present head offices that are unreachable to most Ghanaian consumers.

Even in those countries where there is an enacted Consumer Protection Law, consumers cannot profess to know its content in totality. However, just like knowing there is a Police Force that looks out for the violation of criminal laws that we may not even be aware of, citizens still have the responsibility of protecting themselves from crime by learning to lock up their property, keeping their homes insured, staying away from infringing on other people’s freedoms and learning which of their own actions constitute civil wrongs and criminal violations, etc.

Even with the presence of consumer protection organizations, consumers, thus, have a responsibility of learning to read labels of products to check the ingredients, date of expiry, etc since no organization or law will do so for them at the point of purchase. Similarly, consumers are to read and understand contracts there are given to sign before appending their signatures.

Access to financial services is now considered a basic consumer right but the evils of banking and insurance and the vulnerability of poor consumers have grown beyond borders and continents. In Ghana, where over 80 percent of Ghanaians are financially illiterate, and this amazingly includes highly-educated folks, the financial services sector has been swarmed by predatory lending practices from those businesses pretending to be commercial, to the micro-finance and -insurance service specialists, to the non-commercial quasi-NGO (QUANGOs) social missionaries, to the grey area of new innovative mobile phone banking twists. Consumer naivety in financial services has even become a common financial joke in Ghana where consumers are said to always confuse ‘shares’ with ‘shirts’. The Financial Services sector in Ghana and in Africa seem to be loosely regulated by governments and businesses are just paying lip service to voluntary codes outlined by forums such as the Partnership for Making Finance Work for Africa (MFW4A) and the UN Blue Book on Building Inclusive Financial Sectors for Development that have inherent measures to curtail proliferating cross-border shylocks.

On March 15, World Consumer Rights Day (WCRD) 2010, The Consumer Partnership in collaboration with the Ghana Standards Board (GSB) jointly organized a seminar on the Consumers International global theme ‘Our Money, Our Rights’, where a number of financial consumer protection initiatives by SPEED Ghana and the Ghana Microfinance Institute Network (GHAMFIN) targeted at the illiterate and poor consumers were also discussed. This had been an important step in targeting the non-English speaking population as financial literacy educational road shows and drama were conducted in local languages.

The best consumer protection is self-protection and consumers require consumer education to protect themselves in the market place. There is the need for consumer education on financial services to focus on financial capability, responsible finance, consumer protection, and the conduct of business regulation in Ghana. However, most consumer education efforts by government agencies are ineffective because they are in English only and targeted at the literate population who read one or two major newspapers. This leaves about half the population uninformed and uneducated. Consumer Protection Advocacy must thus border on the need for access to stable, secure and fair financial services, which is important for consumers everywhere, not least in the context of the global financial crisis. Government policy makers have a duty to increase consumer information ( ‘truth in lending’ for example), invest in financial literacy initiatives (i.e., consumer education), insist that the retail financial industry take steps to protect consumers (self-regulatory codes of conduct, for example) and encourage the development of an independent regulatory oversight body responsible for monitoring, reviewing and taking complaints. In order to protect consumers, the Government must ensure that consumers have regular reliable information on what services financial institutions offer at which price and what the risk involved is, so that consumers can make well-informed choices.

In a move to protecting Ghanaian consumers in Financial Services, the Bank of Ghana (BoG) has established a new Investigation and Consumer Reporting Office (ICRO) within the Banking Supervision Department (BSD) as the financial industry watchdog office of the Bank of Ghana (BoG), with responsibility for protecting consumers of financial products and services and educating them on their rights and responsibilities. While this effort is laudable, the government must be moving more towards state sponsorship of regulation instead of state provision since this prevents duplication of mandates as is the case of this new ICRO within the Bank of Ghana that is working with the same mission, laws and regulatory authority in all matters relating to banking and non-banking financial business, that is

Bank of Ghana Act 2002, Act 612

Banking Act, 2004 (Act 673)

Financial Institutions (Non-Bank) Law 1993, PNDC Law 328

Companies Code Act 179, 1963

Bank of Ghana Notices /Directives / Circulars / Regulations

Ghana must emulate the example of the US in moving for a new regulatory authority specifically dedicated to the protection of consumers of financial services in the form of the new Consumer Financial Protection Agency (CFPA) that was eventually based on the recognition of the vulnerability of consumers to financial services that are ‘Unsafe at any Rate’ as concluded by Elizabeth Warren in her treatise in a 2007 article in Democracy Journal:

‘It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street… Similarly, it’s impossible to change the price on a toaster once it has been purchased. But long after the papers have been signed, it is possible to triple the price of the credit used to finance the purchase of that appliance … The difference between the two markets is regulation’.

The ineffectiveness of the regulatory role of the Bank of Ghana (BoG) in the financial services sector has been exposed since 2004 when it directed all commercial banks in the country, to abolish and in some instances reduce, what it described as unfair bank charges and fees being charged by the various commercial banks operating in the country. The directive, which employed moral suasion as a regulatory tool, only provided a carte blanche for the commercial banks to further exploit poor Ghanaian consumers through extremely high and unfair interest rates.

The banking population of Ghana is about 20% and many Ghanaian households do not save with the banks because of the low interest on savings resulting in a gap that has gained Ghana the status of the country with the highest lending rate in sub-Saharan Africa.

With Ghana’s interest rate currently ranging between 23.5% and 41.6% compared with an average estimated rate of 14% for sub-Saharan African countries and 3.34% for Asia’s emerging economies, the present business environment promotes a let the borrower beware [‘caveat emptor’] approach to banking and financial services, which the UN Bluebook on Building Inclusive Financial Sectors for Development (2006) considers as a minimalist option that is purely ‘anti-consumer’. This attitude exploits uninformed and uneducated financial consumers and leaves very little responsibility to the lenders. There is the need for an enforced shift from letting borrowers beware to letting the lenders beware, a ‘caveat venditor’ approach as a first step.

Since the beginning of 2010, it seems that most of the global agencies such as Consumers International (CI), World Bank and the International Organization for Standardization (ISO) Consumer Policy Committee (COPOLCO) have gained a new consciousness on the exposure of African and third world consumers in general to the vicissitudes of the financial sector. CI used financial services as the theme of WCRD 2010 to raise awareness of the issue that cuts across borders not only in Africa but also in Europe and the US as the crises has shown. The World Bank Group is developing a Global Program on Consumer Protection and Financial Literacy to address these questions and help consumers help themselves, using a successful program piloted in Europe and Central Asia, the Global Program will be available to developing countries worldwide. And ISO-COPOLCO has initiated a process to gather information on consumer protection issues related to the provision of financial services, and the growth of new technologies and business models that have evolved in response to consumers’ needs in financial services such as ethical practices in the provision of financial information and disclosure, best practices regarding the provision of financial services, appropriate design of information for targeted consumer financial products, questionable business practices (e.g. aggressive marketing practices, unfair contract terms) and liability issues, as well as mechanisms of enforcement and redress.

The global consumer, it appears, is not fully protected and is unsafe in any currency given the present practices in the financial services sector.

Soft as silence, Obama’s Consumer Protection Advocacy has ridden on the waves of the global economic recession and landed on the African Continent, for the past two years, through the Office of International Affairs of the United States Federal Trade Commission (FTC). The African Consumer Protection Dialogue is gaining ground and bringing in its trail big players such as Consumers International (CI) and the World Bank.

This has been part of the FTC’s second year of consumer education outreach to the African continent in its commitment to working towards consumer protection in a global competitive marketplace that knows few boundaries. In a bid to sensitizing consumer protection enforcement agencies in African countries on the need for closer co-operation and a common framework to tackle cross-border fraudulent and deceptive commercial practices, the FTC seems to be laying the groundwork for enhanced international co-operation on a larger number of consumer protection issues in Africa.

As most of existing national laws and enforcement systems designed to address fraudulent and deceptive commercial practices against consumers were developed at a time when such practices were predominantly domestic, and such laws and systems are therefore not always adequate to address the emerging problem of cross-border fraudulent and deceptive commercial practices, the Office of International Affairs of the FTC is working with competition and consumer protection agencies in Africa to promote cooperation and convergence toward best practices and is also actively assisting developing countries in their transition to market-based economies and their development of competition and consumer protection agencies. The FTC also aims at helping current regulatory environment for consumer protection to be consolidated from the fractured array of national agencies and regulatory authorities from the example of the recent move of the US in the establishment of the Consumer Financial Protection Agency (CPFA).

After haggling with African governments with the attendance of Consumers International (CI), the global consumer lobby, the FTC is now globe-trotting from one African country to another gathering consumer protection groups and government regulatory agencies alike in a consultative technical assistance that seeks to persuade African governments adapt the successes of the FTC institutional and legal framework to the African setting.

It appears that the promotion of consumer protection has finally become one of the tools of Obama’s public diplomacy efforts. With the increasing penetration and influence of the Chinese in Africa, it seems that the only way the root out the Asian menace is to cripple the shoddy products that used to be the hallmark of the rogue trade of the awakening giant through co-operation.

In the light of present developments some Africans are quite strongly behind China with her easily accessible credit and technology transfer with softer ties. Quoting Makwaia wa Kuhenga, [The Citizen, Tanzania]: ‘The propaganda against China most often than not is as if China is poised to grab vast swathes of land in Africa to meet this Asian country’s “hunger” for raw materials and energy! But the real worry of those projecting China in this manner with the intent to scare African countries is that the owners of these multinational media agencies are wary that Africa may diversify its trade relations in favour of China, thus ditching Africa’s former colonial powers.’

Third World consumers as well as poor consumers in advanced countries have always been at the vulnerable end of rogue trade as a pitiful result of trade liberalization. Poverty has turned out to be the very nemesis of poor consumers faced with a libidinal bargain hunt for the cheapest offers and multiple choices between various degrees of both locally produced and imported shoddy and hazardous products. In the absence of affordable options and the right to affordable choice, poor consumers only exercise their will and purchasing power in an act of faith with the ‘audacity of hope’ that by chance they shall get value for their money. ‘But compared to the former colonial powers in Africa who seem to sustain an exploitative relationship in Africa via subtle means, it would appear the Chinese want to hand Africa – not free fish already cooked on the table – but hand us fishing nets to go and fish ourselves in the sea; true to their ancient adage and tradition. What are we ready to accept: fishing nets or mosquito nets?’, says Makwaia wa Kuhenga.

On a balance, the stance of the US in relation to China is highlighted be Nye as he says ‘If America treats China as an enemy today, it will ensure future enmity. While we cannot be sure how China will evolve, it makes no sense to foreclose the prospect of a better future. America’s current policy combines economic integration with a hedge against future uncertainty… But, while such hedging is natural in world politics, modesty is important for both sides. If the overall climate is one of distrust, what looks like a hedge to one side can look like a threat to the other’. International relations in the 21st century is no longer exclusive, and there is neither a cold war expectation that countries align to a dominant power as it used to be. Or maybe Africa is presently riding the Non-Alignment Trade Bandwagon and cannot be bothered by hidden agendas as long as the continent gets the support she needs, irrespective of the source?

A delegation from the Council for International Consumer Protection of the United States Federal Trade Commission (FTC) met with the Consumer lobby in Accra-Ghana under the auspices of the Ministry of Trade and Industry on Wednesday to deliberate on ways of leveraging the institutional strength of the FTC in establishing enforcement mechanisms to protect Ghanaian consumers.

This was part of the FTC’s second year of consumer education outreach to the African continent in their commitment to working towards consumer protection in a global competitive marketplace that knows few boundaries.

In a workshop themed ‘Empowering Consumers through Education’, the FTC delegates Deon Woods Bell and Shaundra L. Watson delivered presentations with Ghanaian counterparts on key topics that included common consumer protection challenges in the legal frameworks of both Ghana and the US, financial practices, internet fraud, consumer education tools, and dispute resolution and redress mechanisms. According to Ms Bell, the principal, but not the only, consumer protection agency at the federal level is the United States Federal Trade Commission (FTC). The FTC works alone, but in concert with other federal agencies, to administer a wide variety of consumer protection laws. The overall goal is to afford consumers a deception-free marketplace and provide the highest-quality products at competitive prices.

Representatives of consumer protection organizations such as the Consumer Partnership (The COP) was in attendance and offered useful suggestions on how to adopt and implement the lessons learned from the FTC cases and consolidate the Consumer Protection Bill in terms of content and the institutional setup of the proposed Consumer Protection Authority (CPA) that will function as a parallel of the FTC. Other consumer NGOs present were Consumers Association of Ghana, Consumer Protection Agency and Consumer Services Association.

Discussing the legal authority of the FTC, Ms Watson indicated that the organisation has enforcement and administrative abilities and has two main goals of protecting consumers by preventing fraud, deception, and unfair business practices in the marketplace and of maintaining competition by preventing anticompetitive business practices. She added that under the FTC Act, the FTC can make victimized consumers whole through restitution and punish wrongdoers through disgorgement of ill-gotten gains. The FTC seeks these remedies when it can objectively determine a clear violation of a law and reasonably calculate the damages payment. The FTC does not have the power to bring criminal charges. Any such federal cases in the consumer protection area would be brought in federal courts by the U.S. Department of Justice.

The Office of International Affairs of the FTC works with competition and consumer protection agencies around the world to promote cooperation and convergence toward best practices and also actively assists developing countries in their transition to market-based economies and their development of competition and consumer protection agencies.

Updating the audience on the status of the Consumer Protection Policy and the long-awaited Consumer Protection Bill, Mr. Ben Peasah, a Director at the Ministry of Trade and Industry, intimated that the Policy is before Cabinet pending approval after which the next steps towards a consultative development of the Bill can commence.